Business

How Facebook Mastered the Art of Survival

When a notable startup threatens Facebook, one of two things happens: Mark Zuckerberg will attempt to buy the company. Or he will threaten to destroy it.

In the cases of Twitter and Snapchat, Zuckerberg reportedly did both. For Twitter, the acquisition offer came first, in 2011, followed by the threat that Facebook would simply create its own product to bury Twitter. (Facebook also came close to hiring Twitter cofounder Jack Dorsey while he was temporarily ousted from his company.)

Despite its behemoth status, Facebook isn't exempt from the kinds of threats it poses on other companies. For the better part of the past decade, Facebook has been a target for competitors. Indirectly, dozens of startups have nibbled at the corners of Facebook's reach, and still others created new products that Facebook wasn't yet providing.

Yet 10 years after Mark Zuckerberg built "Thefacebook" in his Harvard dorm, Facebook has more users, more revenue, and arguably more impact than it ever has. How has the social network stayed relevant over the years?

Facebook was able to acquire Instagram and hire cofounder Kevin Systrom (left) in 2012, but was unable to lure Twitter and its cofounder Jack Dorsey (right) in 2011.

By evolving constantly, says Nate Elliott, a principal analyst at Forrester Research. "Facebook continues to evolve its offering," he explains. "It continues to develop its own new features. It continues to steal liberally from its smaller competitors, and the combination of those two strategies has added up to a site that has beaten the odds and stayed relevant for users for a very long time."

Facebook adds multiple features or changes the platform any given week — in fact, engineers tweak its desktop site multiple times per day. In addition to fixing small issues or bugs, the company tests new products often, and different groups of users are unknowingly interacting with new features or design changes at all times.

When looking to add such new features, Facebook often looks internally first, says Brian Blau, research director for consumer technology at Gartner. Often times, if Facebook can build it, it will.

"When a company like Facebook goes to design a new product, they think about the competition, but what they think about more is their own strategy and how they're going to move that forward," he explains. "If they're confident that the feature is going to be a good feature, then they're just going to move forward."

Over the years, Facebook has created its own products, such as News Feed and Facebook Home. Then it's borrowed (or directly copied) from competitors like Twitter by adding hashtags and trending topics. And it tried to stomp out Snapchat by building disappearing photo application Poke. Even its standalone messaging app, Messenger, which provides the same basic function as text messaging and competes with messaging startups like Kik and WhatsApp, spent a week atop the App Store in December.

Facebook also experiments with hybrids, for example, borrowing checkins from Foursquare and implementing them in a new way. Instead of offering the checkin as a standalone activity, Facebook incorporated Places into status updates. The move was very successful.

"I think Facebook Places, and what Facebook evolved it into, pretty much knocked Foursquare out of the game," says Elliott.

Mark Zuckerberg and sister Randi celebrated at Facebook's holiday party in 2006. The company was not yet three years old.

Stealing ideas from competitors is nothing new, and Facebook isn't the first company to adopt the strategy to survive. Building out new features isn't always the best way to go, however. Sometimes, when competing against an established brand, an acquisition is worth the millions (or billions) it costs the company.

This was the case with Instagram, which Facebook bought for $1 billion in 2012. Facebook could have easily added a photo filter feature to its platform, but rather than continue to compete with a known and trusted brand like Instagram, it chose keep the photo-sharing app out competitors' hands, says Blau. "Facebook didn't need Instagram to bolster its photograph and images database," he says. "What they bought was a brand and a new way of socializing content."

What Facebook has proved over the past decade is that there is more than one way to stay relevant, and it's that flexibility that's allowed it thrive. When the company needed to buy, it bought. When it needed to steal, it stole. That's part of adapting, and Facebook has done it well.

"The fact that there is no pattern ... that is explicit on the part of Facebook," says Blau. "They don't want to settle into a pattern, because if they do they'll get complacent.

"[Zuckerberg] instructs the employees to make sure that they are breaking things along the way, and if they are not making mistakes, they're not improving."

These mistakes, which Zuckerberg has endorsed in his "Move Fast, Break Things" mantra, have driven Facebook for the past decade. It's a method that turned a tech startup into a tech giant, despite its competitors. And it's the strategy that will determine Facebook's next 10 years.

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